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The Bank of Japan has followed up the earlier emergency statement by Governor Haruhiko Kuroda saying the BOJ will buy 500bn yen of JGBs in an unscheduled repo operation, an unexpected liquidity boost.

BOJ kuroda

 BoJ Chief Kuroda

BOJ Emergency Statement

Earlier on Monday Bank of Japan Governor Haruhiko Kuroda said the central bank will take necessary steps to stabilise markets jolted by the coronavirus outbreak. This flowed through the Dow Jones Index having it's biggest one day rise ever on speculation about coordinated global policy action.

Statement by the Governor March 2, 2020

Bank of JapanGlobal financial and capital markets have been unstable recentlywithgrowing uncertaintiesaboutthe outlook for economic activitydue to the spread of the novel coronavirus.The Bank of Japan will closely monitor future developments, and will strive to provide ample liquidity and ensure stability in financial markets through appropriate market operations and asset purchases - BoJ Website

Kuroda’s comments were made in an emergency statement just days after a similar move by Federal Reserve Chair Jerome Powell are a signal the world’s biggest central banks were mustering a coordinated response to the crisis.

French Finance Minister Bruno Le Maire also said on Monday that G7 major economies would take “concerted action” to limit damage from the epidemic, with the group’s finance ministers to discuss the best approach by phone this week. Kuroda said financial markets have made “unstable movements” amid heightened uncertainty over the impact on the economy from the epidemic.

“The BOJ will monitor developments carefully, and strive to stabilise markets and offer sufficient liquidity via market operations and asset purchases,” he said. The statement’s language suggested the BOJ would make full use of its existing tools to flood markets with funds, before pondering additional monetary easing steps.

Source: BoJ

From The Traders Community News Desk

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